Nest Realty’s Sweat the Details Podcast Episode 81

Sweat the Details Podcast by Nest Realty cooperation

Nest Realty’s Sweat the Details podcast continues, now on Episode 74, and we’re excited to bring you interesting conversations that touch on real estate — and how we look beyond real estate for inspiration.

Listen to the podcast here, and subscribe to the podcast here.

Summary:

Jim and Greg Slater chat with Russ Edwards, President of TIger Solar in Charlottesville, VA.

 

 

Here is the transcript from the show for any of our hearing impaired friends or those who prefer to read!

Russ: Thanks for having me here. I am mostly just a dude that lives in Charlottesville. I live two, three blocks that way behind the Dairy Marta Kit. And I live here with my wife and my four children. children elementary school through high school and I’ve been doing construction and renewable stuff for about 20 years here in Charlottesville and the last three years have been operating Tiger Solar.

Nest: So what is Tiger Solar? We are an EPC, we’re an engineering procurement and we’re a contract, a solar contractor. We design and we build solar projects and we do that for the residents.
residential industry and for the commercial industry and we also service other people’s solar projects. So some other contractor has built it in the past. They’re not around or their service is suffering for some reason and we can step in and take care of those property owners or building owners, those homeowners that have a project. So solar has been taking off in the last few years. 18 24 months. It feels like it’s kind of big.

Spurning that well like why are people more interested now in solar than they were 10 years ago? It’s a good question. So Yeah, it’s there’s a little bit of snowballing You know 10 10 years ago if you saw one solar system on top of one roof every hundred houses It just looked Unusual and and it and it was it was somebody who was an early adopter It was somebody who maybe the financing made sense clearly ten years ago, or they just had a long -term trajectory But they were willing to take some some risk and just you know try it out and move forward with it In the last five years, that’s really changed so that It makes clear clear financial sense most of the time, many, many times. And so it’s become more common as you see, OK, two, three, four of my neighbors or fellow business owners have had a really good experience with it.

I think that compounds willingness to look at it. You know, I think about 10, I looked at my app. before I got here and it was this is my 10th year with solar So when Jim asked that question,

Nest: I was gonna ask the same question but I wanted to look at over a decade and Because it’s been an interesting from my vantage point ebb and flow of the popularity of it I think we live in a little bit of a I have a cute point of view because There’s the right places and wrong places for solar in some cases and there’s no perfect place in our market than an area like Crozet and that’s because you have have hundreds of energy -efficient homes built in new communities with no trees around them, right? So those homes are ready for solar, but not every home may be ready for solar, and they don’t understand if they’re ready for solar and things like that. But can you speak to the– and then we also had our own local conditions, right? A bunch of people jumped into the market, not all of them are still here.

Have we settled into a place– place where it what’s the degree of difficulty of helping people are interested in solar get over the hurdles and what are those hurdles that they consider yeah I mean most people have a maybe a my experience is most people have kind of an intuitive understanding of like plumbing in the walls electrical in the walls and how an HVAC system it makes things cooler it makes things hotter and
and a lot of those components that are much more mature, the industries are much more mature, and the adoption rate is 99 percent, 100 percent. When it comes to solar, it’s still a young industry, we’re still in an early adoption world.

I think we’re getting past that. now in the last few years, where it’s become more of a commonplace technology investment to look into. But people still have vastly different ideas when they walk in the door of what is solar going to do for them. Some people think it’s going to power their neighbor’s home, power their home. They’re never going to be– need to be on the line. grid anymore. They’re gonna sell power back to the power. They’re gonna sell power. That’s right. So and that’s that’s totally understandable, you know, that that popping with a key term on that that you’re referencing net metering is where you set up sell it back to the power company. Good question. Net metering means you produce a kilowatt hour and you receive a kilowatt hour credit.

It’s a one to one. one. My solar system made a kilowatt hour. The utility is going to honor and give me a credit of a kilowatt hour on my bill. Okay,
that’s what net net meetering and that’s that’s Virginia, other other states, other utilities, in other parts of the country may have different shades of how they do that.

But you if you start with that one to one correlation, then you can begin to to understand how other utilities across the country do that do that transaction.

Do you have any visibility into I mean I looked at the the stats looks like from 20 to 21 there’s a 30 % increase in residential solar in the US. We’re one of the top five countries as far as adoption rate. Yeah. Have you seen any parts of any trends from the other countries? countries that are coming here as far as technology or how it’s being placed on properties or anything like that.

That’s a really good question Jim. I don’t know that I’m the best person to speak to. International trends versus here. One thing that one thing that makes that a very clunky process is that each utility,
each state, each country. has very different rules and regulations on what can be done okay and so and very different economics so in Hawaii batteries took off in the Caribbean batteries take off very quickly in states where you have a time of use rate this is kind of getting the weeds but it’s not a one -to -one you know if you your midday at noon you’re paying six cents a kilowatt hour You’re buying kilowatt hours at six cents, but at 9 p .m. You’re buying it at 20 cents, right? Those are states where batteries that technology is adopted much more quickly because there’s there’s an economic argument for that But in other states, so it’s just it gets really it’s so the utility world is so Dissinigrated not, you know the same from county to county at some that need know.

I’m just thinking about Texas, but that’s a whole another conversation. Yeah. But you know, so, so let me step back. Yeah. Yeah. As you got into the weeds there. Yeah, sorry. No, no, that’s it’s a, you know, it’s a it’s a weedy environment, if you will. What are the two or three questions that a buyer of solar should ask or a buyer of a home with solar should ask? Thank you.

So um, the weeds is where we often get too quickly and what we try to do is hey let’s make this really simple. For all of your life, for all of our parents and some of our grandparents lives who had electricity, electricity was an expense. The only category we knew was to buy electricity from a utility.

There was no world in which we could you know have the analogous of building a well in your backyard and getting your own water. That changed in the past 20 years, 25 years, to where we have a new technology, it’s actually not new, it’s 60 years old now -ish, or if you go back to Orsted, you know, 100 -something years old.

And you can produce your own electricity. own energy at your property for your use and that’s that’s where we like to start us to say hey we have a very different paradigm for changing an expense into an investment it’s analogous to saying look you’ve rented your whole life you’ve rented houses your dad your mom your grandparents rented like there was no paradigm for owning your own home home.

There is now a paradigm for owning your own energy. And instead of, for the next 25 years, having zero payback, zero payback to keep paying the utility, now you have an opportunity to have any payback, which is awesome. You have an opportunity to, you know, instead of paying 100, 200, 300 bucks a month as an expense out the door, it’s gone, to change that into an investment that has a return.

So, Greg, I’ll push that back to you. He’s talking about the investment. Have you seen people, an increase in the ability for the people touching a transaction, realtors, appraisers, buyer, sellers, placing a value on solar? Because five, seven years ago, if that even sooner, solar was regarded as a utility that didn’t have value.

100%. – I think, you know, since my adoption of solar 10 years ago, you know, I was connected to it for a variety of reasons. Across the spectrum,

I actually appreciate the economic considerations, which we can talk about, which we simplified back then as bulk buying power at a fixed price, right? And that that’s the rent, renting versus owning conversation, right? You’re giving money to a landlord that never comes back versus Paying down the principal on your board and that’s what that powers do is paying down the cost you spent.

Yeah The the other Into that spectrum is actually having appreciation for doing something that is helpful to the environment if you believe in Doing things that are more helpful to the environment and I happen to do that So I I got it on a variety of levels.

Yep, but from the value conversation in real estate You It gets a little more complicated and we’ve made tremendous strides in that because What I explained to people is we If you talk to an appraiser you don’t appraise solar and parts and labor You appraise the value of solar based on the value of the energy it produces and so appraisers have created forms and formulas for the ones that are trained on how to figure out what solar is worth that’s not brand new on a home that’s not brand new that’s being sold. Does that make sense? – Without getting weedy and detailed, if you’re driving down the street and you see a house that has solar, what is your first thought as far as value? – It adds value, okay? – And I say that because 10 years ago, we’ve all had people come to us and say, “Hey, there’s solar, does that affect the value of that?” the house? Like, well, yeah, I will give aesthetically, it I think it’s becoming much more common. And so, as some brand new, as you were mentioning earlier, Russ, it’s like,

Oh, that’s, that’s solar. And that’s that’s ugly. And now it’s like, Oh, that’s solar. I’m going to pay less money.

Well, let me take it as simple as I looked at my I look at my app, not as frequently as I used to what app, an app on my phone that tells me the production of my solar panels. I if you want and tell if it was sunny or not based on the little graphic shows that you can look backwards and see what the weather was like. But, you know, the first thing I would say about solar providers and installers like yourself, when they tell you this is how much solar you’re going to make over the next 25 years, they’re incredibly accurate by looking at long term weather patterns and the exposure.

I mean, my graph for what I make on an annual basis, it’s like a straight line across the top in the first 10 years. years. Now that can degrade a little bit over time which is getting in the weeds but at the end of the day the solar panels on my house on average have produced about $600 worth of power a year, $600 to $800 and then I’m at the point where they’re about paid off. So what is the value of six or $800 a year that I don’t have to spend on power and the solar panels are paid off.

There’s a value to that and that’s the math they used to figure out what they’re worth going forward because it’s gonna make my solar panels are guaranteed to make roughly that level of production for the next 15 years.
That’s where the warranty ends. I hear that and I think that it that’s when you know representing clients it’s it seems like it’s less of a financial benefit and more of a psychological benefit to the planet if you will because it because it’s the babe the buyback time is what 15 years give or take with that I think it’s closer to 10 because you have renewable energy credits and some credits again I think it’s one where if you’re making a direct investment in your home solar might be the second or third thing you do from an upgrade perspective but it’s one where you’re gonna have that confidence of knowing that you’re off you’re a little bit off grid not gonna be fully off grid, and you’re saving money every month. Is that fair?

Yeah, that’s fair. I typically think of the payback as a red herring. OK, why? Why? Because you’re starting with– the question– question to me it presupposes that there’s any payback anywhere else You know your kitchen renovation or your HVAC or you’re paying the utility You know two three hundred dollars a month one hundred to three hundred dollars a month.

There’s zero payback For paying the utility You know that money right thousand two thousand three thousand four thousand dollars a year whatever that is is for you. Zero payback. Money out the door, it’s just a strict expense. It’s pay to play. If you want to live there, that’s out the door. So what we’re trying to help our customers quickly understand is this is an investment vehicle.

Now it’s a lot of other things, too. But it’s at least an investment vehicle. And it’s at least– and it should be, if done well. an all but guaranteed investment for 25 years that’s based on the module manufacturer credit you know high credit worthiness of the module manufacturers and they are giving a guarantee that those modules are going to produce for 25 years plus and they’re only going to degrade down to 90 % by 25 years that’s why we start with that time frame right and we look at that and say okay if you have 10 20 30 40 thousand dollars whatever that system to cover your bill is going to be why would you take that $10 ,000 that $1 and put it into this investment versus a mutual fund or a bond or anything else if you’ve got it and this is really speaking of sort of cash investment and there’s other ways of approach right we look at that that and start saying okay based on the incentives you can get and the tax trade you can get and the depending where you are if there’s a solar rec or if there’s a you know renewable energy credit yada yada yada like lots of weeds this is equivalent to a 6 % return on investment over that 25 year period.

So now the question is is it better for me to invest here or invest some somewhere else? Just an investment question, but when we look at that, we see, oh, you know, this specific house can have a 10 % internal rate of return for 25 years.

On commercial properties, especially with some of the USDA reap grants that are available in loads of areas, we’ve seen IRRs of 20, 25%. That’s one of the first numbers I’ve heard. it viewed that way as far as from an investment vehicle saying, you know, there aren’t many investments, you can go by a bond or a T bill or whatever and say, Oh, you’re gonna get x percent per year guaranteed, right, as much as anything’s guaranteed, right for 20 plus years. Yeah. And this is a very, very low risk. It should be if you work with the right contractor and they do it well, it should be an extremely low risk investment. This is like like bond to conservative mutual fund kind of investment. – That’s fascinating. So on that point, talking about the good contractor, I know how I can advise people to find the right agent for them. I know the right questions to say, here’s how you vet whether Greg’s any good for you. But from a, coming in blind, what are two questions that are, or some way that a buyer or a buyer realtor can help a buyer evaluate whether that contractor is good?

Two questions. The first two that comes to mind are, are you local? Okay. And the second question is, are you guys turnkey?

What do you do at all? Do you design it yourselves? Do If I’m talking to a salesperson, are you an employee of this company?

Or are you an out, you know, am I dealing with an out, am I dealing with a brokerage that just outsources the sales, the design, the construction, the service? Or am I dealing with someone who does all of those?

Now, a brokerage can’t do that. it well, but they normally don’t. And normally what’s happened all over the country, over and over and over and over, is that the brokerage model of outsourcing everything, having great marketing and branding, it’s really pretty. But it overexpands and then it bloats over and over and over and over.

The analogy I want to make, because that was a great answer because I’m sitting here here thinking about it as someone who talks to people about solar a lot what two questions would I recommend that they ask and well I didn’t think of those in that time frame we had to think about it those are really good answers because it made me think about the same thing for a lender right yeah you you want a local lender and you want somebody you want to know where they are in the business model of handling that money and whose money is it and how they’re getting paid and and are you dealing with someone and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid and how they’re getting paid gonna be there to stand behind their product and their problems when they occur? The unfortunate thing is not that not that any one of those models in a vacuum is bad necessarily there are advantages and disadvantages but in the solar world the unfortunate thing is if you if you’re someone comes and knocks on your door midday you are not going to know is this a low Do they do all the work themselves and how well do they do that? Or are they a brokerage? And that becomes really unclear in that sales process. Do you do the work yourselves? Yes, we do. But what they mean is we contract the work ourselves. We subcontract it to someone else, ourselves. I like that answer so much because sometimes I talk to people who are predisposed to be anti -solar or not believing in it and they always start with…the horror stories of the companies that have come and gone and tend to put a spin on it, like the whole thing’s not legitimate. – So longevity and financial stability.

Yeah, for sure, for sure. The landscape out there right now, let’s say we’re 20 to 30 years into this industry, and that’s generous 30 years ago.

I mean, honestly, I think… it’s like five to seven. Right. I mean, yes, it’s been there. We have a local agent, Charlottesville, who was doing it 30 years ago. But he was– That’s right. –an anomaly. Whereas now, I think the prevalence of it– in my neighborhood, you see solar everywhere, Greg’s you see solar everywhere. I see other markets that we track, the solar adoption rate is getting greater and greater and greater. But that happened just within the last handful of years.

Yeah, 30 years ago, if you start– (laughs) I don’t know if you could publish this, but 30 years ago it seems like you were probably a mad genius if you started a similar company. 20 years ago, you were probably crafty, probably a little hippy, and environmentally like, that’s why you did it 20 years ago. 10 years ago, you started, maybe for those reasons, but also, it’s gonna be a business. It’s gonna be you know, it’s gonna produce capital So I you know you’re you’re we’re all local here, but for the listeners not from here.

Tiger hasn’t always been in the solar business. What was what was Tiger originally?

Yeah, so I’m wide with this is originally. Where were you and second is why yeah? our particular makeup is there’s kind of two stories that converged. One is I’ll start on the solar side. One is in 2004, a guy named Paul Riesberg who’d been in finance who wanted to start over started a company called Alt Energy Incorporated. And they began doing PV photovoltaic solar what we think of a glass panels on a roof, and they started doing solar thermal. thermal using the sun’s heat to transfer heat to a tank, a water tank. Rolled out with in 2004, 2005, doing those two things. 17 or 18 years later, had a great sort of a cult following with their with people who’d work for them just really great customer experience, custom jobs, had a real real niche here in Virginia and a few other locations. At that time, 2017 -2018, here starts the second story.

Tiger Fuel, who goes back to 1982 here in Charlottesville, David Sutton founded that company back in 1982. His sons Gordon and Taylor Sutton took over the business in the early teens to 2010s They were very interested in solarizing their properties and went out to RFP put put an RFP out to solicit You know a solar contractor this they by by far had the best experience with all energy through the RFP process And so began hiring all energy to Solarize their properties so – So what I heard is that a fuel company bought into a solar company.

Yeah, Tiger Fuel, historically, delis, oil and gas, car washes.

Sorry, I’m smiling over here because the Bel Air sandwiches that I grew up with, they started the gourmet gas station trend in Charlottesville and it spread around the country. – But no, I mean, I think that I find it fascinating. that a fuel company who’s done propane, gas, all that stuff in the non -renewable resource sees an opportunity to buy into a renewable resource business. Because hopefully, that’s the future of where we’re going.

Yeah, that’s right. Yeah, from a distance– and I had this suspicion too in 2020 when I first started talking to Gordon and Taylor. I didn’t know them personally. I knew Tiger Fuel– Fuel had this great reputation in town, if you’re listening from somewhere else. They’re the kind of company that you see handing over big checks to a school or to a local nonprofit. They are the kind of company that gets voted, best employer of the year for whatever year in a row. They really take care of their employees. They really take care of their customers. They do, for example, do a lot of home heat in central Virginia, and it is hard to find a customer that doesn’t applaud and praise them over some of the national brands that do the same thing. And in a space where we’ve had some turbulence with, because most solar companies are startups, right? Yeah. And when you have a complete startup of an organization, there’s always going to be risk involved if the people running it are going to have the ability to manage it in a way that is sustainable.

So, when I learned Tiger companies getting into the solar space, and I was actually super excited about it because that company definitely has the history of the brand and the commitment to the community that is all aligned with what we need behind solar resource in this market. Yeah, and all energy had all the good stuff and fragile stuff of a startup of a mom and pop shop. all of the good service But also all the the fragility of are they gonna make it they’re on a shoestring. How you know, will they survive if you? Invest big dollars with all the energy.

Are they gonna be around in five years or ten years? That’s just you know, that’s the world of a startup business. That’s why we when you know from Greg in my perspective It’s why we tell our clients, you know, we’ll be here when when you’re when you’re ready for the next phase of your life.

Yeah, it’s because we will be here here, which I think that not every business has that, you know, the lack of fragility and that stability in the confidence. Right. One step back to something you mentioned earlier, like Hawaii has one of I think they’re the highest adoption rate of solar in the in the U.S. in California.

You mentioned batteries. What’s the adoption rate locally and you know, in the eastern seaboard, if you if you know for battery storage. storage. And is that the next thing in the evolution of solar package?

Yeah. My, you know, sitting here in central Virginia, my perspective on batteries is that in many states, it’s still early days.

In some states where you have time of use, rate schedules, where that makes an economic creates an environment where there’s an economic argument. for batteries it’s not just the you know trending gadget and it’s not just that it’s not just backup or security it’s not not just a generator but when there’s an immediate economic argument you see the adoption rate scale because it can really work with solar brilliantly in central Virginia we don’t have that time of use schedule and So we don’t have so when we talk to customers we make it, you know, we want them to understand really quickly Hey, this is a currently a substitute for a generator.

Is that what you’re it? How? How important that is is that to you? for this to be electric and for this to be Quiet and reliable and lots of other things that are great about batteries, but that you know, that’s that’s different So adoption right here in Virginia is very low in terms of batteries versus batteries and, you know, solar. So you sort of not not pure luxury, but a luxury choice. I say because I have a client who, you know, he bought two battery packs and he bought two electric cars. Yeah, he has solar and he said it was what else was I gonna do?

Yeah, that’s stage of life. Yeah, I can probably count on both hands. right? The number of batteries that I’ve seen, but they’ve been added in the new construction.

So I think if you’re building a higher performing home and you have that opportunity to invest and maybe finance it over the life of that mortgage, and that’s where it can start to make more economic sense faster.

Totally. – But generally speaking, if you own a home and you’re thinking about solar and batteries, like you said earlier, earlier, there may be a conversation in between those investments you need to make, you need a holistic approach to how your house is consuming energy and then how you want to provide that energy at the end of the day. Because I often tell people they’re trying to lower their cost of operation of their home and I’m like, well, you have a 500 gallon propane tank in your yard, the solar is not going to offset the consumption of that gas. You know, the first step might be getting rid of the gas furnace or in some cases even older types of equipment,
heating homes. We end up doing a lot of rough ends and I think a lot of other local solar companies are doing the same where we’re doing the solar because it’s many, many times a no -brainer and instead of adding that battery now, we are making sure that it’s compatible to do that later because it is continuing to stay there. So future proofing if you will. That’s right. Thank you.

So Russ, and I’m going to put to Greg, too. I’ll start with Greg. Greg, any final thoughts you would share with the audience about your experience with solar and then off the Ross? If you’re curious about it, I think you just have to engage with a professional like Russ and his company, because it’s a different conversation around every house, right? And at the end of the day, we need power or energy to fuel our homes, and there’s a cost to that, and there’s a different source of getting it now that we’ve never had until recent years and you just have to do that evaluation and understand it and once you get that level of understanding I think it will lead you down a path where you can decide if it’s right for you or not.

So I would say interject that you know when any agent in this world has people, you know we have HVAC tax, we can text while we’re doing an inspection, we have a plumber, we have a roofer. roofer, handy people, but they’re harder to come by. But I mean, I think that now we’re building the relationship with Tiger as far as, you know,

I’ll text Ross and say, hey, I’ve got a dumb question, how can I help my client? So I think that my take would be if you’re an agent, find and build that relationship. If you’re a consumer, you do the same. We’ll find an agent who’s well versed in this arena to help you ask those. Again, I always say, say dumb questions if I’m entering a new space, but ask those questions that you need to know as you move forward.

So Russ. Yeah, we were talking about this before we got started. I mean, I think getting a quote, I mean, I know that sounds very tailsy, but I mean, I think getting a quote is a great way to just go through whether you’re 100 % intent or 2% intent on, you know, moving forward. I think it’s a great idea. You also will vet out really quick. you know If you’re saying Harry a local or you turn key The answers that you get to that question will Answer an invisible third question was does this experience feel good?

You know am I getting a weird gut reaction to the person talk to me? Do they feel like they’re just throwing? Stuff at the wall. Do they feel trustworthy? Do I get you know? What does my gut say about this and that often will begin to tell you yeah, this is the kind of company it in person. I want to do business with versus something just doesn’t feel right here It’s feels high pressure feels you know They’re walking out to the car to give me a you know 10 minutes to make a decision

Right, I would walk away from that stuff trust your gut. So our podcast is called Sweat the Details. What is one detail that you sweat every day?

Callbacks. Not people calling us and not necessarily that we’re getting a call that a system isn’t working or something’s wrong with that.

I work really, really good at taking care of that stuff. But what I really sweat is my team and our being very consistent with returning calls promptly, with being super responsive, with making sure that nobody ever had to double click. click, you know, come back to us. And I think it’s, I don’t know entirely why I just think customer service is the holy grail and doing it consistently and doing it well.

I think it’s like a calling that every business should have and aspire to and like be just doggedly determined. People are really important and there’s a lot of noise out there and it’s really busy.
and really fast and it’s so hard to do but we just want to answer the phone and call people back I mean it’s like super simple but love it yeah absolutely love it Russ thank you Greg thank you and I hope you enjoy the show.

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